Correlation Between Janus Triton and Ivy Mid

Can any of the company-specific risk be diversified away by investing in both Janus Triton and Ivy Mid at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Janus Triton and Ivy Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Janus Triton Fund and Ivy Mid Cap, you can compare the effects of market volatilities on Janus Triton and Ivy Mid and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Janus Triton with a short position of Ivy Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Janus Triton and Ivy Mid.

Diversification Opportunities for Janus Triton and Ivy Mid

0.85

Correlation Coefficient

Janus Triton  Ivy Mid

Very poor diversification

The 3 months correlation between Janus and Ivy is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Janus Triton Fund and Ivy Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Mid Cap and Janus Triton is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Janus Triton Fund are associated (or correlated) with Ivy Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Mid Cap has no effect on the direction of Janus Triton i.e., Janus Triton and Ivy Mid go up and down completely randomly.

Pair Corralation between Janus Triton and Ivy Mid

Assuming the 90 days horizon Janus Triton is expected to generate 1.16 times less return on investment than Ivy Mid. But when comparing it to its historical volatility, Janus Triton Fund is 1.13 times less risky than Ivy Mid. It trades about 0.02 of its potential returns per unit of risk. Ivy Mid Cap is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,515  in Ivy Mid Cap on September 23, 2024 and sell it today you would earn a total of  259.00  from holding Ivy Mid Cap or generate 10.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Janus Triton Fund  vs.  Ivy Mid Cap

Janus Triton

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Janus Triton Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Ivy Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ivy Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Janus Triton and Ivy Mid

The main advantage of trading using opposite Janus Triton and Ivy Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Janus Triton position performs unexpectedly, Ivy Mid can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ivy Mid will offset losses from the drop in Ivy Mid's long position.

The idea behind Janus Triton Fund and Ivy Mid Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.